Bitcoin's price rose more than 4% to over $64K on Wednesday, following a report from the United States Consumer Price Index (CPI) that showed a minor slowing of inflation. This surprise slowdown in inflation to 3.4% year on year fueled optimism among crypto investors.
The report indicated lower inflation rates than in prior months, with a 0.3% increase vs 0.4% in March. Notably, the core CPI, which includes volatile food and energy costs, followed this trend. This news boosted crypto markets as expectations of continuing high interest rates fell, propelling Bitcoin considerably higher.
The lower inflation data also raised chances of a rate drop by the Federal Reserve later this year. Previously, a rate cut this summer appeared unlikely. The odds now look more favorable, which might lead to looser monetary policy.
Beyond crypto, established markets responded strongly. S&P 500 futures jumped by 0.5%, the U.S. dollar index fell, and gold prices rose— which shows broader economic optimism.
Despite these advances, caution remains required. The year-over-year inflation rate still surpasses the Federal Reserve's 2% goal, while core CPI remains at a troubling 3.6%.
